Historically Bad Banks

Gold Hill, Ore. -- The former Chase Bank branch in Gold Hill has been closed for a year now. Just an automated teller machine for residents to deposit or withdraw from their accounts. In the

Posted: Apr 6, 2015 2:04 PM
Updated: Oct 19, 2017 1:38 PM

Gold Hill, Ore. -- The former Chase Bank branch in Gold Hill has been closed for a year now. Just an automated teller machine for residents to deposit or 
withdraw from their accounts. In the early 19th century the Gold Hill 
bank was considered one of the most stable and reliable banks for a 
small town in southern Oregon.  The bank was in a building in the main 
business block on what is now Fourth Avenue, between the Gold Hill Hotel 
and the Odd Fellows Lodge. Ads from the old Gold Hill news from the 
teens urge local residents to save for a brighter future for adults, and 
for their children. They talk about the bank's role in the community, 
and to move to checking. Actual cancelled checks from the Gold Hill 
bank, and deposit slips are in the artifact collection of the Southern 
Oregon Historical Society. A leather gold pouch apparently given by the 
bank to miners who deposited their gold there is with the Gold Hill 
Museum. Other ads show the bank also issued travelers checks, wired 
money anywhere in the world, and even sold insurance. One ad seeks to 
assure depositors that their accounts were safe because they had a sign 
from the old Beekman Bank in Jacksonville saying that Pinkerton 
detectives had their eyes on things. However it only says the sign is 
doing guard duty!

Then, in 1924 rumors started circulating that the bank was in trouble. 
Or at least a bank official was in trouble. The Ashland Tidings' story 
says, "Ugly rumor over Gold Hill Bank"! It says, "according to rumors 
well founded...a shortage made by cashier Bell".... That would be Percy 
Bell... were that he had taken some ten thousand dollars from the bank 
for his own investment, possibly in a mining venture called the 'Ancient 
River Gold Mining Corporation', and it was uncovered in a bank exam by 
state officials. According to the paper, many Gold Hill residents were 
upset that the bank was closed because between insurance and Bell's 
liquidated assets the missing money was covered, and they felt all would 
be well. In fact, many of Bell’s supporters praised him for his efforts 
to increase the banks business. In June of 1924 Bell was sentenced to 
ten years in prison for filing false reports and misappropriation of 
bank funds. The bank’s assets were auctioned off, and Bell's sentence 
was later reduced to parole and restitution. In June the bank re-opened 
with several of those who bought the assets, including Walter Zimmerman 
and Albert Pankey opening a new bank called the Fidelity State Bank, 
which apparently continued to operate for many years.

Another small Jackson county town was also having its own bank troubles 
at the same time. In Butte Falls, which was beginning to boom in the 
teens, the Pine Belt Banking Company built a fine two story wood frame 
building next to the U.S. Hotel. But about a year later a fire swept 
through the structure, burning it to the ground. The bank was rebuilt, 
this time of brick and still stands.

And another story of corruption comes out of Jacksonville where, in 
1919, Chester  Kubli and another man were sentenced to prison for what 
they said were simple cases of overdrawing their accounts a little bit. 
It turned to be 40-thousand dollars.

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